This probably isn't what everyone wants to hear, and it is unfortunate that Xat has dropped to this state, as it used to be my chat system of choice back during 2008, but there came a point where I couldn't stick with what is a fairly antiquated site.
To be honest, Xat missed it's chance five years ago. Discord is basically what I and quite a few people have always wanted, but which we didn't have the resources to realise.
I have seen many sites switch over to Discord, from Chatango and other similar services.
To compete with Discord, Xat would basically have to get rid of powers. All of them. Discord lets you upload your own emojis to your "servers" aka a guild which can hold multiple chats called "channels". Any user can make a server. For free.
That feature alone blows most of the micro-transactions Xat has out of the water, as you no longer need to pay for new smilies, you can simply upload some, and this gives you the flexibility of using whatever you want.
Discord's premium service, Nitro lets you use emojis from any server you're in anywhere. Some special servers, those run by partners, or even discord staff may even have emojis you can use globally simply by joining them. You don't even need Nitro to use them!
Discord has much, much fewer distractions. There aren't micro-transactions which give you fancy colours or purple pawns before your name in the user list. Things are customised as the chat owner sees fit.
They can create custom roles with whatever permissions they wish, have whatever colours they want for those roles. whatever order they please, and set user nicknames for that server to whatever they please.
Discord has no concept of "main owners" which can be granted to multiple users. There is simply an owner who is always the owner of the chat, unless they transfer ownership. While this seems less flexible, this is actually a step forward, as I have seen many, many problems with main owners on Xat before.
Discord has a modern theme on mobile, native, and the web. Xat's chats look like something out of 2007, and the main site's theme looks like something out of the 90s.
Discord is growing rapidly, and I can only see it going up and up. This is because Discord doesn't pursue short-term gains, but the big picture.
And honestly, it's too late for Xat to compete with Discord. Even if it made a move, it would be seen as little more than a copy-cat, assuming that Xat has the time and resources to make a move.
Discord is also in constant development. New features are constantly being released. For free. The current ones they're working on are audit logs and screen-sharing. Audit logs being something you have to pay for on Xat, and last I checked, the theme for it was horrendous.
There were also things like kisses in Xat which are extremely distracting. This isn't possible at all in Discord, and it's actually a *good thing*. Discord's staff are also extremely responsive to the community, in fact I have had the pleasure of meeting one myself. Xat's admins are like unicorns in comparison.
I don't know if Xat can survive, but I sincerely doubt it. It would take a really big move, and a mountain of luck for Xat to manoeuvre itself out of this rut. But, who knows. Anything's possible.